SPEECHES & TESTIMONY

“Another Sad Country Song”

Miranda Lambert has a great country song out right now—“Time to Get a Gun.” Like a lot of great country songs, it tells a story—this one is somewhat tongue-in-cheek, but there’s a bit of truth in it—when people get so fed up, so pushed to the limit, they can be moved to drastic measures. In our case, that means the threat of more prescriptive rules from Congress, mandating specific position limits, because we’ve been unable (or unwilling) to do it ourselves.

Consumers are hurting, at the gas pump and at the grocery store, and if we don’t use all the authorities we have to ensure 100% that the prices they are paying are fair and accurate, I will not be at all surprised if there is an attempt in Congress to take a line from Miranda Lambert, pull out the big guns and simply impose set speculative limits. And there sure would be a lot of people out there singing a sad song about that.

At the risk of sounding like a broken record, let me say it yet one more time: Congress told us to impose limits. We haven’t done it, and we need to do something—NOW. I get it, I get it, I get it—there is a problem with not having swaps data—and that necessarily implicates some kind of delay. But again, as I’ve said numerous times, there are things we can, must, and should do now (indeed, should have done months ago) that are well within our power, authority, and capabilities.

Specifically, we can impose spot month limits on regulated exchanges and on swaps now, based on a percentage of deliverable supply. I also think we could impose deferred month and aggregate month overall position limits now, but I understand (although I'm not saying I agree) the case against doing those before we do over-the-counter limits. Last (but certainly not least) we can continue to monitor markets using the “position points” triggers that I proposed last December.

This is a pretty simple point, and I am surprised at the escalation of it to the level of DefCon One. I’m not talking about imposition of limits that harm markets, or harm legitimate business activity. I’ve made that clear from day one. And in our final rule, I want to make absolutely sure that whatever limits are imposed are conducive to ensuring that both legitimate hedging AND speculating continue, to make these markets work as they should. Let’s not turn this into another sad country song (or at least not any sadder than it already is). Let’s do our jobs and “git ‘er done.”